Cambridge report: crypto needs a common language before it can be regulated

22 Apr, 2019 | Updated: 22 Apr, 2019
by Richard Allen
Regulation
Cambridge report: crypto needs a common language before it can be regulated

The University of Cambridge's Center for Alternative Finance (CCAF) has published a new report, stating that one of the largest barriers to crypto adoption is a lack of clear and consistent vocabulary.

“A variety of terms are used, often interchangeably and without a clear definition,” the report reads. “Even the term cryptoasset lacks a specific definition… cryptoasset and token can have different meanings depending on the context in which they are used.

“Regulators therefore face several challenges: first, to understand the nuances of the different terms, second, to identify the terminology most suitable for their regulatory objectives, and finally to define the terminology clearly and ensure it is used consistently in official statements.”

The report then outlined “a multi-dimensional approach" that would divide cryptocurrencies into three categories. Payment/exchange tokens to be used as means of value, utility tokens which would grant access to a “digital platform or service”, and security tokens which would be used as an investment instrument.

Many jurisdictions have already begun working on this, albeit with most focusing on the security token. As per the report, 82% of the 23 jurisdictions analyzed have determined cryptocurrencies that fit the securities definition.

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